Tax Update Blog

The Ticking Clock for Required Minimum IRA Distributions

December 8, 2021 | Blog
By Melissa White, CPA, AEP®

If you have a traditional IRA or tax-deferred retirement plan account, once you attain age 72 (age 70½ before 2020), you must begin taking required minimum distributions (RMDs) from your accounts. If you do not withdraw the minimum amount each year, you may have to pay a 50% penalty tax on what should have been taken out.

The CARES Act passed in March 2020 allowed people to skip these withdrawals in 2020. When the Consolidated Appropriations Act was enacted on December 27, 2020, many people hoped that the suspension would be extended into 2021. Unfortunately, the RMD suspension was not extended. That means if you have not yet taken your required minimum distribution for 2021, the December 31 deadline looms. Many IRA custodians have cut-off dates for distributions, so if you have not yet taken your RMD for 2021, you should act now.

Related: How the SECURE Act will Affect Your Retirement Plan Right Now.

Stay informed!

This is a roundup of tax news and opinion. Any opinions expressed or implied are those of the author and not necessarily those of Eide Bailly. Opinions found in linked items are those of the authors of the linked item, not of your bloggers or of Eide Bailly. “$” means link may be behind a paywall. Items here do not constitute tax advice.